Mobile is playing an increasingly important role in Facebook's business strategy. People in the US spend, on average, six hours a month using it on desktop. They spend 11 hours each month using Facebook on mobile. Many users in emerging markets have never even seen the PC platform.
When we caught up with Christian Hernandez, director of UK and pan-Euro at Facebook, earlier today, we asked him first about its latest product, Facebook Home. It is an app or an Operating System, or both, and does it matter?
"We want to make the Facebook experience as good as possible,” said Hernandez. “Home is an evolution of our efforts to have deep integration on every device. It is a social layer on top of the Android OS, driving what you do on your phone. The first thing you see is your Facebook posts and messaging. And you can multitask between social and productivity, social and games.
"Home is launching on the HTC First on AT&T in the US and EE in the UK, with more HTC and other manufacturers to follow, so some handsets will come pre-loaded, but anybody with a supported device can download it. We have always been committed to ensuring the best level of service no matter what the handset. Facebook bought Israeli firm Snaptu [in March 2011], which worked with Java clients, to push our ‘Facebook for Every Phone’ initiative. Because of this, we are pretty much the largest app on every smartphone platform. Manufacturers know that if you want data, you want Facebook.”
But Facebook isn't an ad exchange. It uses around 12 third-party DSPs which sell its inventory on an auction-style CPC (cost-per-click) model. It recently announced that advertisers can now buy re-targeted, mobile Newsfeed advertising based on people's browsing habits outside of the platform. Advertisers can also opt in to have only web or only mobile ads, for an app install ad, for example.
“People ask if we are a good platform for direct response and performance,” said Hernandez. “Brands like Fab and ASOS say we are one of the most valuable channels for them for customer acquisition. Using the Facebook dashboard, our clients can merge their corporate email database with Facebook data to find their customers. Then they can either say: 'Only promote my app to existing customers' or: 'Target people who aren't my customers'. This makes it a great acquisition tool. We enable smart targeting, re-targeting, and allow them to target demographics similar to people who use their sites, Facebook's Lookalikes. Most people use their Facebook log-in for sites like Fab, and 30 per cent of its traffic now comes from Facebook."
He said that unlike Google and its GetMo initiative, Facebook does not actively encourage brands to optimise landing pages for mobile, but said if they don't have a mobile site, they can just create a Facebook page. "We have the reach and the data to help brands measure ROI. Whether that's a Newsfeed ad or an app story. We add insight into an industry that's been dying for it. I haven't been as excited about mobile marketing for a long time," the former Google ad man said.
Hernandez denied recent accusations that changes to Facebook’s EdgeRank algorithm have put some brands with big organic audience engagement at a disadvantage to paying advertisers. “There has been an exponential growth in the amount of content – we have to consider how we optimise for the user experience and content that is more relevant shows up more frequently. The things function independently.”
But do people like Facebook ads? “Users believe that there is value in consuming content from both their friends and brands. People give us a pretty strong sign when it's valuable – if not, they can get rid of the ad or mark it as spam. We measure that at a campaign, page or app level. If it's too spammy, the algorithm throttles it down. We work with the creative and agency teams to make sure it's the best possible post – it goes back to them if there is negative sentiment."
Facebook has come a long way from its (somewhat) modest origins in a Harvard student bedroom nearly a decade ago. Was this Zuckerberg's vision? "He wanted to make the world more open and connected for billions of people today and billions more in the future," Hernandez said. "It needs to be accessible through the device they interact with, and future growth will come from mobile. To make that happen, we need a commercial model that works. That is a combination of advertising, which makes up the majority of revenue, and micro-transactions from games.”
Is there a Facebook Marketplace on the horizon? "We recently introduced social gifting so we can remind you it's your friend's birthday and that you need to buy a gift. We have mass daily engagement and we have to look what other experiences we can help curate and see if there is a value in that.”
Christian Hernandez is director of UK and pan-Euro at Facebook